Growing Your Income With Real Estate Investment
It’s generally understood that investing your money is a wise practice that allows your money to grow more quickly than it would if left in your bank account. However, the intricacies of the stock market can be difficult to master. If this is new, intimidating territory for you, consider real estate investment instead. Real estate allows your money to work for you, and while there are upsides and downsides, it’s a great alternative for those looking to grow their income without mastering the stock market.
Upsides: More Tax Deductions With Less Volatility
If you’re a homeowner, you already know there are plenty of tax deductions available to you, such as your property tax and mortgage interest. By purchasing another property, you essentially double these benefits. If you’re operating the property as a rental space, certain operating fees can be written off as well.
While real estate investment may not allow for as much aggressive growth as the stock market, it’s far less volatile, meaning your income can grow steadily over time. If you cultivate a keen eye for real estate trends, you may begin to notice certain areas that are likely to develop handsomely. Investing in properties in these areas will allow you to get in at a great price and benefit from renters looking to move into such a desirable area. You’ll then enjoy an increased value if and when you decide to sell.
Downsides: Plenty of Cash, People Skills and Patience Required
A downpayment is a substantial, upfront expenditure. On top of that, your property may need some upgrades before it can become profitable, so a good amount of liquid capital is necessary. Speaking of which, if you eventually need to liquidize your assets, selling stock is far simpler than selling a house. That said, for those interested in the long game, real estate investments are a great option.
If you decide to rent your property out to tenants, you’ll be a landlord. Being attentive to your renters is necessary to sustain an amicable landlord-tenant relationship. If they’re late on rent, you’ll need an effective way to collect. If they need an appliance replaced, you’ll need connections in the area to fulfill the need. Of course, you can always hire an agency to handle these duties if being a direct landlord isn’t appealing to you.
As you can see, there is much to consider when deciding if real estate investment is right for you. For those looking to grow their income steadily with less risk, real estate might be the perfect solution.